The road to Utopia is the road to Hell. — Communism and socialism are the opiates of the intelligentsia. — The left, in its eternal and futile quest for "equality", is more than willing to abolish liberty and sunder fraternity.

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Restoring the Contract Clause

For decades, the Court has allowed the Constitution’s contract clause (in Article I, Section 10, along with other things the states aren’t allowed to do) atrophy. It reads “No state shall enact any law impairing the obligation of contracts” and was meant to help stabilize the national economy at a time when the states often passed laws that rewrote or erased contracts to benefit certain parties or themselves….

The good news is that the Court is about to hear arguments in a case that could revive the Originalist view of the contract clause. I write about that case in my latest article for Forbes.

Leef fleshes out the sad story of the Contract Clause in the Forbes piece:

American courts took the Contract Clause very seriously until the New Deal. Professor James W. Ely’s recent book The Contract Clause: A Constitutional History (which I reviewed here) recounts the way the Marshall Court esteemed the clause and how it held up quite well (although with some erosion) during the “Progressive” era.

Then came the Great Depression.

Just as the Court turned its back on other cornerstones of limited government and the rule of law during that era, so did it jettison the once-formidable Contract Clause. In a 1934 decision, Home Building & Loan Association v. Blaisdell, Chief Justice Hughes decided that during the “emergency” of the Depression, the Court had to allow legislatures to impose a moratorium on mortgage foreclosures. In an early exemplar of “living Constitution” theory, the Chief Justice said that the Contract Clause “is not an absolute one and is not to be read with literal exactness….” He went on to say that the Constitution’s restraints on power “must not be confined to the interpretation which the framers, with the conditions and outlook of their time, would have placed upon them.”

Just imagine if the First Amendment had been treated that way, giving the government wide latitude to censor or punish free speech and the press on the breezy, “Well, times have changed” approach. The First Amendment would be cowering in the shadows today.

Conversely, imagine if the Court had developed a robust, pro-contract jurisprudence based on the Contract Clause to match its pro-speech jurisprudence emanating the its favored First Amendment. Lots of governmental interference with people’s liberty to shape their lives through contracts they want — or don’t want — would have been prevented, such as minimum wage laws.

But that’s not what happened to the Contract Clause. The courts kept allowing the states to whittle away at it by devising a three-factor “balancing test” whereby the assertion of the slightest state interest in meddling with contracts was usually good enough….

But what’s wrong with the current approach to the Contract Clause, one that, as Chief Justice Hughes said in Blaisdell is based on the “growing appreciation of public needs and the necessity of finding ground for a rational compromise between individual rights and public welfare”?

A lot, Ely argues. It tears apart the plain meaning of the Clause, whose words, wrote Chief Justice Marshall, “are express and incapable of being misunderstood.” Nor, Ely continues, was there ever any justification for the politically expedient “let’s forget about this Clause because the country is facing an emergency” rationale of Blaisdell and subsequent cases. The truth is that the Clause was inserted precisely because the nation needed contractual stability in the distressed times of 1787 and no amount of economic turmoil can be alleviated by allowing states to rewrite contracts….

Furthermore, Ely contends, the current interpretation of the Clause (again, Marshall would laugh at the idea that it needs any “interpretation”) is far too vague, giving lower courts little guidance. They are only supposed to apply the Contract Clause only if the legislative interference is “substantial” and “unreasonable.” Ely comments, “Yet it is sadly ironic that the Court has fashioned such an amorphous test for the Contract Clause – the one constitutional provision that, more than any other, was designed to ensure stability and predictability in commercial relationships.”

The Supreme Court will hear oral arguments in the case [of Sveen v. Melin] on March 19. It would be one of the great results of its current term if the justices would not merely uphold the Eighth Circuit [which upheld the contract at issue, despite a Minnesota law that abrogated it] but also give a full-throated declaration that the Contract Clause will henceforth be read just as it was written.

The Supreme Court of 1934 effectively ripped the Contract Clause out of the Constitution. I fervently hope for its restoration. Many things are at stake. As Leef says, a living Contract Clause would have prevented “governmental interference with people’s liberty to shape their lives through contracts they want — or don’t want”. Leef mentions minimum wage laws as an example. In the same category, namely, laws that inhibit job creation, are mandates that require paid family leave and paid sick leave. (The latter was recently dictated by the proglodytes of Austin”s city council.)

Had the Court not killed the Contract Clause in 1934, compulsory recognition of labor unions — one of the biggest job-killers of them all — could have been made purely optional in 1937. It was then that the Court decided in favor of the Wagner Act by invoking the Commerce Clause.

The Commerce Clause has had a long and dishonorable career as an all-purpose justification for dictatorship from D.C. It was taken down a peg in NFIB v. Sibelius (2014) — the nugget of gold in a disgraceful opinion that salvaged Obamacare by other means.

In any event, here’s to the restoration of the Contract Clause — and to the demise of the “modern” reading of the Commerce Clause.

Comments & Correspondence

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On Liberty and Libertarianism

What is liberty? It is peaceful, willing coexistence and its concomitant: beneficially cooperative behavior.

John Stuart Mill opined that "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others." But who determines whether an act is harmful or harmless? Acts deemed harmless by an individual are not harmless if they subvert the societal bonds of trust and self-restraint upon which liberty itself depends.

Which is not to say that all social regimes are regimes of liberty. Liberty requires voice -- the freedom to dissent -- and exit -- the freedom to choose one's neighbors and associates. Voice and exit depend, in turn, on the rule of law under a minimal state.

Liberty, because it is a social phenomenon and not an innate condition of humanity, must be won and preserved by an unflinching defense of a polity that fosters liberty through its norms, and the swift and certain administration of justice within that polity. The governments in and of the United States have long since ceased to foster liberty, but most Americans are captives in their own land and have no choice but to strive for the restoration of liberty, or something closer to it.

Who can restore liberty? Certainly not the self-proclaimed libertarians who are fixated on Mill's empty harm principle and align with the left on social norms. Traditional (i.e., Burkean) conservatism fosters the preservation and adherence of beneficial norms (e.g., the last six of the Ten Commandments). Thus, by necessity, the only true libertarianism is found in traditional conservatism. I am a traditional conservative, which makes me a libertarian -- a true one.

Notes about Usage

“State” (with a capital “S”) refers to one of the United States, and “States” refers to two or more of them. “State” and “States,” thus used, are proper nouns because they refer to a unique entity or entities: one or more of the United States, the union of which, under the terms and conditions stated in the Constitution, is the raison d’être for the nation. I reserve the uncapitalized word “state” for a government, or hierarchy of them, which exerts a monopoly of force within its boundaries.

Marriage, in the Western tradition, predates the state and legitimates the union of one man and one woman. As such, it is an institution that is vital to civil society and therefore to the enjoyment of liberty. The recognition of a more-or-less permanent homosexual pairing as a kind of marriage is both ill-advised and illegitimate. Such an arrangement is therefore a “marriage” (in quotation marks) or, more accurately, a homosexual cohabitation contract (HCC).

The words “liberal”, “progressive”, and their variants are usually enclosed in quotation marks (sneer quotes) because they refer to persons and movements whose statist policies are, in fact, destructive of liberty and progress. I sometimes italicize the words, just to reduce visual clutter.

I have reverted to the British style of punctuating in-line quotations, which I followed 40 years ago when I published a weekly newspaper. The British style is to enclose within quotation marks only (a) the punctuation that appears in quoted text or (b) the title of a work (e.g., a blog post) that is usually placed within quotation marks.

I have reverted because of the confusion and unsightliness caused by the American style. It calls for the placement of periods and commas within quotation marks, even if the periods and commas don’t occur in the quoted material or title. Also, if there is a question mark at the end of quoted material, it replaces the comma or period that might otherwise be placed there.

If I had continued to follow American style, I would have ended a sentence in a recent post with this:

What a hodge-podge. There’s no comma between the first two entries, and the sentence ends with an inappropriate question mark. With two titles ending in question marks, there was no way for me to avoid a series in which a comma is lacking. I could have avoided the sentence-ending question mark by recasting the list, but the items are listed chronologically, which is how they should be read.

This not only eliminates the hodge-podge, but is also more logical and accurate. All items are separated by commas, commas aren’t displaced by question marks, and the declarative sentence ends with a period instead of a question mark.